Directors' and Officers' Liability Insurance

This type of insurance contract provides for compensation of the expenses that company executives may incur in respect of the claims made against them in connection with their erroneous or negligent acts, or breach of duty.

Personal responsibility of legal entities’ managers for the decisions they make is established by the Civil Code of the Russian Federation and the Law on Joint Stock Companies.

Claims and actions in respect of D&O are most often submitted by the shareholders; employees, including ex-employees; customers, government authorities, previous owners or owners of acquired companies, creditors, groups of public activists. The grounds for such claims may include: indiscreet public statements, unintentional breach of official duties, incomplete disclosure of information, poor management or supervision over the work of the employees, labor disputes, sexual harassment at work, etc.

Property interests related to the possibility of losses and/or defense costs arising as a result of claims against the insured person — the director and/or the company — for the damage and/or losses caused to third parties, the company or the company’s employees as a result of erroneous actions of the director and/or the company, including:

the company’s expenses in connection with the compensation paid by it to its directors based on claims;

directors’ own expenses, if the company is unable to compensate them according to the law;

Companies’ expenses on claims against such companies (and not personally against the directors) in connection with the erroneous actions relating to the securities turnover and personnel recruitment;

property interests associated with the risk of incurring losses and/or defense costs arising as a result of claims presented to the Insured Person and/or the company for compensation of damages and/or losses caused to third parties, the company or the company’s employees as a result of erroneous actions of directors and/or the company.

The risk of claims that led to liability, or the need to cover the costs of defense associated with such claims due to the erroneous actions of the director which were first filed against the insured person;

the risk of claims in respect of securities which entailed liability or expenses for defense in respect of such claims due to the negligent actions of directors and/or companies;

the risk of losses that may be incurred as the costs of the legal defense in accordance with the laws of the country in which the insured event occurred.